602 F.

2d 1387

UNITED STATES of America, Plaintiff-Appellee,

v.
An article of drug consisting of the following:
15866/50-Tablet Bottles, more or less, and
512/500-tablet bottles, more or less,
labeled in part:
(bottle)
"Tutag Pharmaceuticals, Broomfield, Colorado * * * X-Otag
Plus Tablets Each tablet contains: Orphenadrine citrate 50
mg., Acetaminophen 325 mg. Caution: Federal law prohibits
dispensing without prescription * * * "
(Insert)
"X-OTAG PLUS TABLETS * * * 76/2 Tutag Pharmaceuticals,
Inc.,
Broomfield, Colorado 80020"
and undetermined quantities of the aforesaid article labeled
as aforesaid, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
TUTAG PHARMACEUTICALS, INC., a corporation, and
Stanley J.
Tutag, an Individual, Defendants-Appellants.
No. 77-1946.

United States Court of Appeals,

Tenth Circuit.
Argued March 14, 1979.
Decided Aug. 6, 1979.

William R. Pendergast, Washington, D. C. (Wayne H. Matelski,

McMurray & Pendergast, Washington, D. C.; Christopher Lane,
Cassandra G. Sasso, Dowson, Nagel, Sherman & Howard, Denver, Colo.,
on the brief), for defendants-appellants.

Bruce F. Fein, Washington, D. C. (John H. Shenefield, Robert B.

Nicholson, Dept. of Justice, Washington, D. C.; Jeffrey B. Springer,
Donald O. Beers, Food and Drug Administration, Rockville, Md., on the
brief), for plaintiff-appellee.
Before SETH, Chief Judge, LOGAN, Circuit Judge, and MILLER,*
Judge.
MILLER, Judge.

This appeal is from a judgment and orders of the district court1 (nonjury trial)
permanently enjoining defendants-appellants from marketing the drug X-Otag
Plus in interstate commerce and directing the destruction of a quantity of the
drug seized by the Government. We affirm the injunction, but remand the order
for destruction to the district court to stay destruction of the seized drug
pending further proceedings.

X-Otag Plus is a prescription drug in tablet form having as its active ingredients
50 mg. of orphenadrine citrate and 325 mg. of acetaminophen;2 it also contains
a number of inactive ingredients. Its intended use is to relieve muscular pain.
Orphenadrine citrate has been used since 1951 in the United States and in other
countries as a muscle relaxant and for its analgesic properties. Acetaminophen,
which can be purchased over-the-counter, has been used as an analgesic and as
an aspirin substitute.

Background
3

The Government initiated a condemnation proceeding pursuant to 21 U.S.C.

3343 against a quantity of the involved drug that had been seized by the
Government. The drug was manufactured by Tutag Pharmaceuticals, Inc.
("Tutag") and marketed under the name X-Otag Plus. The Government later
sought an injunction against Tutag under 21 U.S.C. 332(a)4 to prevent any
further shipment of X-Otag Plus in interstate commerce. In support of both
actions, which were consolidated for trial, the Government argued, as it does in
this appeal, that X-Otag Plus is a "new drug" within the meaning of 21 U.S.C.
321(p)(1)5 and that it cannot be introduced into interstate commerce unless, as
required by 21 U.S.C. 355,6 the FDA has approved a new drug application
("NDA") or an abbreviated new drug application ("ANDA").7 In October of
1976, Tutag submitted an ANDA to FDA for X-Otag Plus; but in April of 1977
the Director of the Bureau of Drugs decided that an NDA rather than an ANDA
was required and gave notice of opportunity for hearing on that decision. On

June 27, 1977, Tutag requested a hearing, and this was held before
Administrative Law Judge Daniel J. Davidson, who denied approval of Tutag's
ANDA in a decision dated February 8, 1979 (Docket No. 77N-0145).8 Both
parties have filed exceptions with the FDA Commissioner. Meanwhile, in
March of 1977, Tutag filed an NDA for X-Otag Plus, but this has never been
approved. Prior to filing either an ANDA or an NDA, Tutag shipped X-Otag
Plus in interstate commerce. (Although both 21 U.S.C. 331(a) and 334(a)
(1) prohibit misbranded drugs, the parties stipulated that, if X-Otag Plus is not
a "new drug," it need not have an approved NDA or ANDA and is not
misbranded.)
4

The district court found Inter alia : (1) The production of an administrative
record supporting the FDA's contention that X-Otag Plus is a "new drug" is not
required for the court to determine matters before it in condemnation and
injunction proceedings; and (2) The Government had shown, by a
preponderance of the evidence, that X-Otag Plus is a "new drug" within the
meaning of 21 U.S.C. 321(p)(1) for purposes of the condemnation and
injunction proceedings. Technically, the latter was a finding that FDA had
probable cause to believe that X-Otag Plus was a "new drug." 9 Ewing v.
Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088
(1950). See CIBA Corp. v. Weinberger, 412 U.S. 640, 93 S.Ct. 2495, 37
L.Ed.2d 230 (1973).

OPINION
5

Tutag argues that under Rutherford v. United States, 542 F.2d 1137 (10th Cir.
1976), the district court should have remanded the case to FDA for
development of an administrative record in support of FDA's contention that XOtag Plus is a new drug. In Rutherford, FDA had refused to allow the shipment
or distribution of laetrile on the ground that it was a "new drug," even though
there was no NDA on file with the FDA and there had been no formal
determination of whether laetrile was a new drug. Plaintiffs, a class of
terminally ill cancer patients, who were without the means, by themselves, to
undertake an FDA proceeding, sought an injunction against the FDA's action.
This court remanded the case to FDA for development of an administrative
record. Especially to be noted is that FDA had not issued any regulation or rule
on laetrile and that this court regarded the FDA action as in the nature of a
declaratory order10 requiring an administrative record.

Here, however, the FDA has only instituted condemnation proceedings against
a certain quantity of the drug and injunction proceedings against a single drug
manufacturer. Such action, including any assertions in connection therewith, is

not in the nature of a declaratory order. The determination that X-Otag Plus is a
"new drug" (for purposes of the condemnation and injunction proceedings) was
made by the district court following a trial; whereas, in Rutherford, the FDA
had already determined, prior to trial, that laetrile was a new drug and had
refused to allow its distribution to patients in the United States. In this case,
although one lot of the drug was seized by the United States Marshall, no
destruction order or injunction against Tutag was issued until After a trial,
giving Tutag ample opportunity to rebut the FDA's case. We conclude that,
under the facts of this case, no administrative record was required. Accordingly
we hold that the district court did not err in refusing to remand to the FDA for
development of an administrative record as urged by Tutag.
7

Tutag also argues that the district court erred in finding that, for purposes of the
condemnation and injunction proceedings, the Government had shown, by a
preponderance of the evidence, that X-Otag Plus is a "new drug" within the
meaning of 21 U.S.C. 321(p)(1), Supra note 5. The district court thoroughly
reviewed the conflicting evidence on this point in over four pages of the printed
opinion, Supra at 110-14, and, as pointed out in note 2, Supra, found that "both
of the component parts of X-Otag Plus have Not been generally recognized as
safe and effective." We are satisfied that this finding is not clearly erroneous.
See United States v. United States Gypsum, 333 U.S. 364, 394, 68 S.Ct. 525,
92 L.Ed. 746 (1948).11

As the district court made clear, Tutag is not precluded from proving before
FDA (and the circuit court of appeals on review) that X-Otag Plus is not a new
drug. In the proceedings which, as related above, are still pending before FDA,
Tutag may convince the FDA that the drug is not new or it may satisfy the
requirements necessary for placing a new drug on the market. In either event
Tutag would be able to market X-Otag Plus.

The district court ordered destruction of the lot of X-Otag Plus already seized
by the United States Marshall,12 saying (441 F.Supp. at 115):

10 our reading of the statute, the language "any article condemned . . . Shall be
By
disposed of by destruction," 21 U.S.C. 334(d)(1) (emphasis added), does not
encompass staying destruction while awaiting an FDA determination . . . .
11

However, the pertinent language of 21 U.S.C. 334(d)(1) is as follows:

12

Any food, drug, device, or cosmetic condemned under this section shall, after
entry of the decree, be disposed of by destruction or sale as the court may, in

accordance with the provisions of this section, direct . . . .

13

The phrase "may . . . direct" instead of "shall . . . direct" or "directs" is advisory

rather than mandatory and clearly implies that the court has some discretion
over the time and manner of destruction. No need appears for destruction of the
seized drug prior to conclusion of Tutag's drug application proceedings, which
conceivably might turn out to be favorable to it and to justify revocation of the
order for destruction. Accordingly, we remand the order for destruction to the
district court to stay destruction until completion of said proceedings and
possible revocation of the order for destruction itself.

The Honorable Jack R. Miller, Judge of the United States Court of Customs and
Patent Appeals, sitting by designation

Reported Sub nom. United States v. X-Otag Plus Tablets, 441 F.Supp. 105
(D.Colo.1977)

Although acetaminophen has been generally recognized as safe and effective

when properly labeled, orphenadrine citrate has been determined to be a "new
drug" by the Food and Drug Administration ("FDA") (39 Fed.Reg. 9487,
March 11, 1974). Accordingly, the district court found that "both of the
component parts of X-Otag Plus have Not been generally recognized as safe
and effective;" further, that there is no generally recognized combination drug
in the exact form, dosage, and application of X-Otag Plus. Compare United
States v. Articles of Drug (In re Lannett Co.), 585 F.2d 575 (3d Cir. 1978)

21 U.S.C. 334(a)(1) provides, in pertinent part, as follows:

(a)(1) Any article of food, drug, or cosmetic that is adulterated or misbranded
when introduced into or while in interstate commerce or while held for sale
(whether or not the first sale) after shipment in interstate commerce, or which
may not, under the provisions of section 344 or 355 of this title, be introduced
into interstate commerce, shall be liable to be proceeded against while in
interstate commerce, or at any time thereafter, on libel or information and
condemned in any district court of the United States or United States Court of a
Territory within the jurisdiction of which the article is found . . . .

21 U.S.C. 332(a) provides:

(a) The district courts of the United States and the United States courts of the
Territories shall have jurisdiction, for cause shown, and subject to the
provisions of section 381 (relating to notice to opposite party) of Title 28, to

restrain violations of section 331 of this title, except paragraphs (h)-(j) of said
section.
21 U.S.C. 331(a) provides:
The following acts and the causing thereof are prohibited:
(a) The introduction or delivery for introduction into interstate commerce of
any food, drug, device, or cosmetic that is adulterated or misbranded.
5

21 U.S.C. 321(p)(1) provides, in pertinent part, as follows:

(p) The term "new drug" means
(1) Any drug . . . the composition of which is such that such drug is not
generally recognized, among experts qualified by scientific training and
experience to evaluate the safety and effectiveness of drugs, as safe and
effective for use under the conditions prescribed, recommended, or suggested
in the labeling thereof, except that such a drug not so recognized shall not be
deemed to be a "new drug" if at any time prior to the enactment of this chapter
it was subject to the Food and Drugs Act of June 30, 1906, as amended, and if
at such time its labeling contained the same representations concerning the
conditions of its use . . . .

21 U.S.C. 355(a) reads, in part, as follows:

(a) No person shall introduce or deliver for introduction into interstate
commerce any new drug, unless an approval of an application . . . is effective
with respect to such drug.

As found by the district court, an ANDA may be filed, rather than an NDA,
when FDA finds such an application to be sufficient for the drug in question. 21
C.F.R. 314.1(a). Approval of the use of an ANDA relieves an applicantmanufacturer from furnishing studies showing the safety and effectiveness of
the drug in question

As the district court pointed out, final FDA determination on ANDAs or NDAs
is subject to review by the circuit court of appeals

The court said, 441 F.Supp. at 115:

The Order of this Court is in no way a final determination that the drug X-Otag
Plus is or is not a "new drug." Such a determination is for the FDA. We simply
find that for the purposes of an enforcement and injunction action, and limited

to issues inherent herein, the United States has shown by a preponderance of

the evidence that X-Otag Plus is a "new drug."
10

A declaratory order is a "self-operative industry-wide regulation." Abbott

Laboratories v. Gardner, 387 U.S. 136, 147, 87 S.Ct. 1507, 18 L.Ed.2d 681
(1967)

11

Tutag also raises a question about problems with the ANDA proceedings at the
FDA. However, this appeal is concerned only with the condemnation and
injunction proceedings before the district court

12

By order of the district court, this destruction order has been stayed pending the
outcome of this appeal